“Beijing could deploy as much as 6 trillion yuan ($842.9 billion) in new fiscal stimulus, but the fund will be more of a ‘risk package’ to recapitalize banks, clean up sold but unfinished housing units and ease local governments’ hidden debt. This is to solve the deflationary pressure, not to stimulate consumption yet.”
Hang Seng Index Declines Amid Global Market Pressure
The Hang Seng Index extended its losing streak to three weeks, declining by 1.03%. The Hang Seng Index succumbed to rising US Treasury yields, tracking the Dow and S&P 500 into negative territory.
Real estate and tech stocks contributed to the decline. The Hang Seng Mainland Properties Index (HMPI) declined by 2.04%, while the Hang Seng Tech Index (HSTECH) ended the week down 1.37%.
Tech giants Baidu (9888) and Alibaba (9988) slid by 6.70% and 5.12%, respectively. However, real estate stocks saw heavier losses, with Shimao Group Holdings (0813) tumbling 19.86% in the week ending October 25.
On the Mainland, PBoC’s stimulus measures and hopes for further policy announcements drove demand for Mainland China-listed equities. The CSI 300 gained 0.79%, while the Shanghai Composite advanced by 1.17%.
Commodity Markets: Crude Oil, Iron Ore, and Gold
Hopes for further stimulus measures from Beijing pushed iron ore prices higher. Iron ore spot increased by 3.19% in the week. Gold advanced by 0.96%, striking an all-time high of $2,758.
Additionally, WTI Crude also ended the week higher. Notably WTI Crude Oil rallied 2.27% on Friday alone, closing the week at $71.78. Concerns about possible supply disruption from the Middle East drove oil prices higher.
ASX 200 Ends the Week in Negative Territory
The ASX 200 declined by 0.87% in the week ending October 25, reversing a 0.84% gain from the previous week. Rising US Treasury yields impacted buyer demand for banking and tech stocks.
The S&P/ASX All Technology Index ended the week down by 1.67%. Aussie banking stocks National Australia Bank (NAB) and Westpac Banking Corp. (WBC) declined by 0.59% and 0.83%, respectively.
Meanwhile, gold-related stocks reacted to gold spot price trends, with Northern Star Resources Ltd. (NST) rallying 7.08%. Mining giants BHP Group Ltd. (BHP) and Rio Tinto Ltd. (RIO) ended the week with gains on higher iron ore spot prices.
Nikkei Index Falls Ahead of General Election
In the week ending October 25, the Nikkei Index fell by 2.74% despite a weaker Japanese Yen. The USD/JPY rallied 1.87% in the week, striking a mid-week high of 153.184 before easing back. Higher US Treasury yields and uncertainty about Japan’s general election impacted demand for Nikkei Index-listed stocks.
Notable stock movers included SoftBank Group Corp. (9984), which slid by 3.59%, while Tokyo Electron (8035) declined by 1.19%. Nissan Motor Corp. (7201) gained 0.10%, with the weaker Yen bolstering demand for export-linked stocks.
Outlook
Investors should stay vigilant, with stimulus measures from Beijing, the Middle East conflict, and the US Presidential Election in focus. For the Nikkei, Japan’s general election results and the Bank of Japan’s penultimate 2024 interest rate decision require consideration. Stay informed with our latest news and analysis to manage positions across the Asian equity markets.
